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Minecraft 1.18 update has a number of experimental settings, including simulation distance settings and a few other game updates. The simulation distance setting affects how far away things can be while the game continues to either play out the processes the item is undergoing, such as items smelting in furnaces, or how far away mobs will continue to think and have AI.
If this distance is too far, or there are too many players simulating totally distinct areas, the performance of the game can start to lag and even come to a stop in serious cases. This means that appropriate simulation distances are vital to keeping the game running as efficiently as possible.
Exploring the ideal simulation distance in Minecraft
Singleplayer mode
A singleplayer world only relies on the player’s computer and must only calculate the mathematics and run simulations for a single person. This means that, assuming a player’s computer isn't strong enough to adequately run a higher simulation distance setting, there really is no reason not to.
It is important to note that any farm, AFK or otherwise, outside of the simulation distance of the game will cease to function. But since chunks operate at full world heights, players can potentially stack farms above one another up to the build cap. The simulation cap does not matter, so long as the player remains in the chunks directly below them.
Ideal simulation distance for servers
Since a server or realm has to do all the in-game calculations for every single player in the game, the simulation distance settings can cause major issues. If each player has their simulation distance set to a high number, and they are all in completely different areas of the world, there will be noticeable lag on the server’s end, unless the server is running on a very high-end CPU.
While the impact of large simulation distances is minimized so long as players remain near one another, the potential issues mean players should keep the simulation distance to a minimum. Otherwise, settings can also be implemented that would allow the server to enforce a simulation distance cap and keep potential server lag to a minimum.
Conclusion
As established, for a singleplayer world, there is no reason not to simply run a simulation distance as high as the computer can handle without the game stuttering.
Multiplayer servers and realms are a more interesting question. They will depend on if the server is hosted by a player or paid for through a Minecraft hosting company or Mojang themselves in the case of a realm. Apart from the former case, simulation distances can easily be set to a high mark, since those servers come with existing capabilities to support a large number of concurrent players.
